As I write this, the EIA crude oil inventories have just come out but the Fed’s interest rate announcement is 3 hours away.

Front month oil, which was down $3 yesterday has recouped all of those losses and then some, setting a new record today. The price action surprised me somewhat, but a good friend pointed out that even though there was a build in refined product the crude draw was the big issue.

“The refining capacity problem is sooooooo 2006” was how he explained it. The absence of a “shoulder period” this fall could mean permanent overcapacity for oil refining and shipping. Let me sum it up for the jerks we are stuck deciding amongst for President: It’s not the refineries, stupid.

It does not matter how much “wishcasting” (a take off on forecasting) Larry Kudlow, Pat Buchanan, Hillary Clinton, Al Gore, Ben Bernake, Goldman Sachs and the rest of Wall Street, CNBC etc… do. They can shout what they will from the mountaintops. This is not something that these people can spin. They cannot sweep oil supplies and inventories under the carpet. It is what it is, and it does not care if you are Republican, Democrat, Conservative, Liberal, Libertarian, etc… Kudlow was on his show last night telling people that Oil was a short (that you could make money betting it was going down – this has been his position for several years now… thankfully he is not running a portfolio for anyone, he’s just another know-nothing entertainer posing as an economist. Actually, he IS an economist; maybe he is an economist posing as an entertainer… one could go crazy trying to figure this out… just kidding). I was trying to buy some options on oil futures yesterday, and even though the front month was down $3, my bid was not hit. I should have called Larry and told him to take the other side of the trade…

Somebody should tell Larry Kudlow, et al, that while they have been saying oil is a bubble since it hit $35 in 2003 the price has nearly tripled (If oil falls back to $75 no doubt these dopes will claim vindication, meanwhile had you listened to them and went short you would have hanged yourself in your garage long ago).

Now we await the Fed.